Problem - Study Company's income statement for 2012 appears below.
STUDY COMPANY Income Statement For the Year Ended December 31, 2012
Sales (40,000 units) $1,000,000
Variable expenses 700,000
Contribution margin 300,000
Fixed expenses 345,000
Net income (loss) $ (45,000)
Answer the following independent questions and show computations using the contribution margin technique to support your answers:
1. What was the company's break-even point in sales dollars in 2012?
2. How many additional units would the company have had to sell in 2013 in order to earn net income of $45,000?